Digital finance use rises in PH, but gaps remain, says PIDS

More Filipinos are turning to digital platforms for everyday transactions, from paying bills to sending money. E-wallets, online banking, and cashless payments are becoming more common across the country, reflecting a steady shift in how people manage their finances.

Why it Matters: Digital finance is often seen as a way to expand access to financial services. But if usage does not translate into real inclusion, the benefits may remain uneven, especially for low-income groups who are already at a disadvantage.

This shift suggests growing comfort with digital tools, but it does not automatically mean that more Filipinos are part of the formal financial system.

A study by the Philippine Institute for Development Studies (PIDS) shows that while digital adoption is increasing, financial inclusion is not keeping pace. Account ownership rose from 29% in 2019 to 56% in 2021, and digital payments now account for 57.4% of retail transactions. Despite this, more than half of Filipinos still remain outside the formal financial system.

The report, titled “Digital Financial Platform Engagement and Financial Inclusion in the Philippines: Insights on AI Deployment and Policy Implications,” finds that Filipinos who actively use digital financial platforms are more likely to own formal accounts. Regular engagement, rather than simple access, plays a key role in inclusion.

However, several barriers continue to limit participation. These include lack of money, high transaction costs, limited documentation, and low trust in financial institutions. These challenges are more pronounced among low-income households, preventing wider adoption of formal financial services.

The study also notes the growing role of artificial intelligence in financial platforms. AI is being used for fraud detection, credit scoring, and customer support. While this can improve services, adoption is uneven.

Larger financial institutions are leading in AI adoption, while smaller cooperatives and savings banks face resource and infrastructure constraints. This creates a gap between consumer demand for digital services and institutions’ ability to support them.

At the same time, risks related to fraud, data privacy, and cybersecurity remain concerns that can affect trust and usage.

To address these issues, PIDS recommends strengthening digital infrastructure, improving financial and digital literacy, and ensuring responsible AI governance. The study also highlights the need for coordination among policymakers, regulators, and the private sector.

The findings come ahead of a PIDS webinar on April 30, 2026, which will discuss how AI is shaping jobs, skills, and public sector readiness.

As digital finance becomes more common, the question now shifts from access to meaningful participation. Can digital adoption truly lead to broader financial inclusion in the Philippines?